The U.S. Energy Information Administration increased its forecast for crude oil prices through 2019 as U.S. production remains on pace to break record highs and as domestic imports drop to their lowest levels in almost 60 years.
The agency said Brent crude oil spot prices averaged near $77 per barrel in May, an increase of $5/bbl from the April average to reach its highest monthly average price since November 2014.
Looking ahead, the EIA forecasts that Brent spot prices will average $71/bbl in 2018 and $68/bbl in 2019, marking a near $2/bbl increase in the 2019 forecast since last month.
West Texas Intermediate crude oil prices are seen averaging near $64.50/bbl in 2018 and near $62/bbl in 2019.
The EIA estimates that U.S. crude oil production averaged 10.7 million barrels per day in May, up 80,000 bbl/d from the April level, with output continuing to rise in the coming years. The agency projects that U.S. crude oil production will average 10.8 MMbbl/d in 2018, up from 9.4 MMbbl/d in 2017 to its highest annual average since 1970, before rising to an average 11.8 MMbbl/d in 2019.
At the same time, the EIA forecasts that total U.S. crude oil and petroleum product net imports will fall from an annual average of 3.7 MMbbl/d in 2017 to 2.5 MMbbl/d in 2018 and to 1.6 MMbbl/d in 2019, which would be the lowest level of net oil imports since 1959.
Outside the U.S. the EIA forecasts that crude oil production from OPEC will average 32.0 MMbbl/d in 2018, down 0.4 MMbbl/d from the 2017 level, but will increase slightly to an average of 32.1 MMbbl/d in 2019. The EIA assumes increasing production from Persian Gulf producers, primarily Saudi Arabia, will offset decreased production in Venezuela and Iran.
